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crypto.news 2025-02-19 11:04:22

Bitcoin’s liquidation profile follows completely different pattern than 2021, analysts say

With lower leverage in the system, Bitcoin’s liquidation events no longer resemble the sharp swings of 2021. Bitcoin ( BTC ) liquidations are unfolding completely differently from the last bull market, blockchain firm Matrixport says, noting that despite daily liquidations hitting $600 million at times, prices have found a bottom with minimal follow-through. https://twitter.com/Matrixport_EN/status/1892106849350189427/ In a Feb. 19 research note , analysts note that the current dynamic is a sharp contrast to 2020 and 2021, when high leverage in the market led to extreme volatility. “Unlike the last bull market, where liquidations triggered extreme volatility, this time around, even with $600 million in Bitcoin and Ethereum liquidations on some days, prices are finding a bottom with minimal follow-through.” Markus Thielen, independent analyst You might also like: Here’s why Ethereum price ‘may be primed for rebound’ Thielen suggests that leverage in the system is now “relatively low,” adding that traders have also become “more strategic” in setting stop losses. The approval of spot Bitcoin exchange-traded funds by the U.S. Securities and Exchange Commission may have also reinforced stronger market conviction, he added. With Bitcoin no longer seen as a high-risk asset, the question is no longer if it could go to zero but how low it might drop. While past data shows that liquidation-driven sell-offs are limited, risks still remain. Analysts point to the Inter-exchange Flow Pulse indicator, which tracks Bitcoin movement between spot and derivatives markets. Typically, more BTC flowing into derivatives signals bullish momentum. However, the indicator is currently flashing bearish, suggesting Bitcoin could face more resistance before a breakout. Read more: Here’s why majority of Bitcoin investors unlikely to panic sell

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